Grains are mixed to close:
Dec Corn -6 1/2 cents/bu (6.85 1/2)
Nov Soybeans -17 1/2 cents/bu (14.61 1/4)
Dec Chi Wheat + 10 cents/bu (9.03 3/4)
Cdn $ +0.00015 (74.835 cents)
WTI Crude Oil -1.00/barrel (82.94)
WOWZA! The USD$ shot to 20-year, yes you read that right…. YEAR highs today following the Fed’s announcement to raise interest rates ¾% with continuing rates in the future (Projects 4.4% rates at the end of 2022, suggesting a 75 and a 50). This is a central bank in full inflation-fighting mode. They reported that they expect to see Inflation of 5.4% at End of 2022; 2.8% for 2023; 2.3% for 2024; 2.0% for 2025.
Wheat was able to slowly climb positive today amid the continued tensions building with Russia and Ukraine. What is Putin going to do next is the real question. At this point, wheat is trading headlines which makes it very volatile and unpredictable. At this point, yesterday’s address is Putin’s attempt to turn the tide in his favor once again, suggesting an escalation of the conflict. That raises the risks that the “safe corridor” agreement to allow cargoes of grain to leave Ukraine may be at risk, but it also raises the risks that further trade out of the Black Sea Region could be curtailed, including shipments from Russia, further tightening the availability of critical food commodities in the weeks and months ahead. At this point, headlines are everything. Expect to see huge volatility in markets as a result, similar to what we saw in early March.
Wheat settled above $9 today which is the first time that has happened since June 29th.
Soybeans and corn fell victim to harvest pressure today. With the $USD so high, we can also expect that corn and soybeans will start to feel the effects of expensive commodity prices on the export market.
The EIA report was released this morning and showed that commercial crude oil stocks increased 1.1 million barrels to 430.8 million, while ethanol stocks decrease 0.3 million barrels to 22.5 million. Ethanol production decreased 62 thousand barrels per day to 901 thousand barrels (seasonal maintance continued to this). The production of ethanol utilized an estimated 88.7 million bushels of corn in the week ending Sept. 16, down from 94.8 million the previous week, and down from 93.9 million bushels in the same week last year. Corn use for the production of ethanol in the first 16 days of the marketing year total an estimated 211 million bushels, down 18 million or 8% from the previous year's pace.
Tomorrow we will see the export sales report for the week ending September 15th.
Funds were thought to have been mixed today with corn and beans sellers and wheat a buyer.